Brock Online Notes

The first overhaul of U.S. energy policy in a decade may not be ready for a vote until next year because of a Republican split over ethanol tax subsidies, the chief Senate tax writer told Reuters News Service on Friday.

Besides unresolved disagreements on $16 billion in energy incentives, Senate Republicans said negotiations for a compromise bill were snarled by House Republicans' insistence on revising air pollution laws and giving liability protection to the gasoline additive MTBE.

Democrats have been locked out of energy bill negotiations for weeks. The disputes prompted Senate Energy Committee Chairman Pete Domenici, who is leading the talks, to cancel a Tuesday meeting where he hoped the 56 negotiators would approve a final version of the bill for floor votes. No new date was set.

"It may be that more pressure needs to build to force compromise," the New Mexico Republican said. "I know we will get an energy bill. I will be patient, but how long should the country wait?"

Senate Finance Committee Chairman Charles Grassley, Iowa Republican, told reporters, "No, definitely not" when asked if negotiations were at a point allowing a bill this year. He said ethanol was "a major stumbling block."

California Republican Bill Thomas, chairman of the House tax writing committee, agreed there was no chance of agreement this week on tax incentives for the bill. Without agreement on incentives, the energy bill cannot go to the floor.

Revision of ethanol tax credits was a front-line dispute for the tax writers. Thomas wants to defer action to a transportation bill next year. Grassley wants to put more money into the federal highway fund to make up for revenue lost to the 5.2 cent-a-gallon tax break given to fuel with a 10% blend of ethanol.

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.